Where Neil Young’s Pono may have flopped with critics, another hi-fidelity music service soon to be owned by a music superstar is hoping to fly. Tidal, a new hi-fi streaming service from Norway’s Asipro, today announced that it will be adding 22 more countries to its list of active markets this quarter, but on the back of just 35,000 subscribers for Tidal and sister service WiMP to date. The news comes on the heels of Aspiro announcing that hip-hop megastar Jay-Z has made an offer to acquire the company for approximately $56 million (466 million Swedish kronor).
If the deal proceeds — and it looks like majority shareholder Schibsted is recommending that it does — Jay-Z will have a tall order ahead of him to gain critical mass for the service. In a quarterly update on its progress where it is already active — the U.S., Canada, UK, Ireland, Finland, the Netherlands, Belgium and Luxembourg — the numbers are small, to say the least.
As of December 31, 2014, Aspiro had 500,000 total paying music subscribers overall, a decline of 2% on the previous quarter. WiMP and Tidal users (the HiFi services), meanwhile, are now at only 35,000 (up 75% on last quarter). The streaming service Tidal alone has only 12,000. Tidal launched for business in the U.S. and UK on October 28, 2014; Canada on December 8, and Netherlands, Belgium, Luxembourg, Finland and Ireland on January 22.
As a point of reference, Spotify recently reported that it had 15 million paying users, and 60 million users overall worldwide. The economics of music streaming, with thin margins needing to be shared among many players, have proven to be tough for smaller companies, and we’ve been seeing a gradual consolidation that some predict will end with only a handful of companies surviving.
Aspiro says that its revenues have gown by 28% in the quarter to SEK288.6 million ($35 million).
Like Pono, Tidal is aiming for the higher end of the market and a quality product, referring to itself as the “ideal music service for those who care about quality.” Also like Pono, it’s based around FLAC technology, specifically FLAC/ALAC 44.1kHz / 16 bit – 1411 kbps.
Given the echoes of Dr Dre and Jimmy Iovine’s involvement with Beats originating around the idea of creating products to appreciate and highlight high-end digital sound services, it may have been the hi-fi aspect of Tidal’s service that struck a chord with Jay-Z.
Tidal currently has a catalog of 25 million tracks and 75,000 music videos, along with a curated discovery platform. It also has integration partnerships with 37 electronics companies, although only 18% of its streams today are taking place through home audio systems. The rest are on mobile (42%) and desktop (39%), the company noted today.
“We continue to accelerate our expansion, as demand for our product keeps rising,” said TIDAL CEO Andy Chen in a statement. “Besides directly from consumers, we are also seeing a very strong growth from new home audio partners. We now have 37 confirmed partners to offer TIDAL across the broadest selection of home audio systems.”
The 22 new markets that will be added this quarter are Austria, Czech Republic, Cyprus, Denmark, Estonia, France, Greece, Hungary, Italy, Latvia, Lithuania, Malta, Norway, Portugal, Romania, Switzerland, Singapore, Slovakia, Slovenia, Sweden, South Africa and Turkey — bring the total number of active countries for the service to 30, with the U.S., Canada, UK, Ireland, Finland, the Netherlands, Belgium and Luxembourg already live.
Updated with correction: numbers represent quarter-on-quarter growth, not annual.